Government plans for VAT will affect adult apprenticeships

With the government announcing that a VAT charge of 20% will be placed on further education (FE) loans, training experts predict that apprenticeships will suffer due to the added expense. Graham Hoyle, CEO of the Association of Employment and Learning Providers (AELP) says: “The current position is very unsatisfactory because it is bound to have a serious impact on the number of adults entering the apprenticeship programme next year. The government’s ambitions to see more higher apprenticeships will be badly affected. The skills minister has been made aware of this and he has given AELP an assurance that further deliberations will continue in tandem with the current consultation on VAT on higher education.”

The changes will come into play in 2013, as part of “24-plus advanced learning loan” scheme next year. HMRC and the Department for Business Innovation and Skills (BIS) have since released a statement saying that no further changes are planned for VAT in the year 2013/14.